US ties get solar power shock

New Delhi, Feb. 11: India-US commercial ties came under fresh strain today when New Delhi vowed to counter any US move to stymie India’s solar power programme.

The US, according to reports, is planning to file a complaint with the World Trade Organisation against India’s solar programme that allows the use of local parts only.

Commerce ministry officials today said it was investigating the US policies and would adequately respond to the move.

“We have clear evidence of, I think, 13-odd states which follow equally restrictive policies. So we are examining their policies,” commerce secretary Rajeev Kher said today.

The US said it would challenge the norms mandating the use of local parts in India's solar programme.

Last year, New Delhi had invited bids for projects with a capacity to add 750 megawatts (MW). The government, however, said local equipment had to be used to generate half the energy.

US trade representative Michael Froman yesterday said the rule violated the international trade law and would raise the cost of solar energy.

Kher said India was also probing possible dumping of solar parts by the US, China and a few other countries.

He said the country’s solar programme did not discriminate against American firms, were WTO compliant and that the country would defend its stand.

“The US already had a consultation with us on solar domestic content and now they have come in for a second-phase challenge. It is not a surprise. We will participate in the consultations. Our current policy is WTO compliant. We will defend it,” Kher said.

A request for consultations is the first step in the WTO dispute settlement process and is intended to help parties find a solution. If the matter is not resolved through consultations within 60 days of the request, the US may ask the WTO to establish a dispute settlement panel.

In recent times, India's ties with US had been scarred first by the arrest of Indian diplomat Devyani Khobragade in New York in connection with visa fraud charges and then by the US aviation regulator’s decision to downgrade India's aviation safety standards.

Corporate interest

Analysts said the move by the US was meant to pre-empt Indian entities bagging all the equipment contract for some proposed large projects.

The country plans to set up a 4000MW solar project in Rajasthan, which will be the world’s largest such facility at a single location.

Kher said several US companies had won contracts in the second phase of the National Solar Mission.

“If you look at the phase-II contracts, you will see that most of them have gone to the American companies. They have participated in those bids and many of them have succeeded,” he added.

Pharma workshops

The US health regulator plans to conduct workshops across the country in the next one year to sensitise domestic drug companies about the changing quality requirements in the American market.

The issue came up during a meeting between chief executives of various drug companies and US Food and Drug Administration commissioner Margaret A. Hamburg.

Wockhardt chairman Habil Khorakiwala said the move was a part of the USFDA’s plan to make Indian firms more aware about the quality requirement of the US.